Micro: Chapter 14

question

the opportunity cost of a firm's production is:

answer

the highest-valued alternative forgone

question

opportunity cost include both _________ and _________.

answer

explicit; implicit

question

the explicit cost is:

answer

a cost paid in money

question

explicit costs are:

answer

opportunity costs

question

the implicit cost is:

answer

an opportunity cost incurred by a firm when it uses a factor of production for which it does not make a direct money payment.

question

what are the two main implicit costs:

answer

economic depreciation
the cost of using the firm owner's resources

question

_________________ is an opportunity cost of a firm using capital that it owns

answer

economic depreciation

question

a firms ______________ equals total revenue minus total cost

answer

economic profit

question

the __________ is a time frame in which the quantities of some resources are fixed

answer

short run

question

the ___________ is a time frame in which the quantities of all resources can be changed.

answer

long-run

question

what are the three related concepts we use to describe the relationship between output and the quantity of labor:

answer

total product: marginal product: average product

question

total product is the

answer

total quantity of a good produced in a given period

question

______________is the change in total product that results from a one-unit increase in the quantity of labor emplyed

answer

marginal product

question

equation for marginal product

answer

marginal product= change in total product / change in quantity of labor.

question

the _________ the slope of the total product curve, the _________________is the marginal product.

answer

steeper; greater

question

_________________________ occur when the marginal product of an additional worker exceeds the marginal product of the previous worker

answer

increasing marginal returns

question

what happens when a small number of workers are employed and arise from increased specialization and division of labor in the production process.

answer

increasing marginal returns occur

question

_____________ occur when the marginal product of an additional worker is less than the marginal product of the previous worker.

answer

decreasing marginal returns

question

what arise from the fact that more and more workers use the same equipment and work space.

answer

decreasing marginal returns

question

which law states: as a firm uses more of a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.

answer

law of decreasing returns

question

______________ is the total product per worker employed

answer

average product

question

average product equation

answer

average product= total product / quantity of labor

question

what is another name for average product

answer

productivity

question

when marginal product is _________ than average product, average product is ____________.

answer

less; decreasing

question

when marginal product __________ average product, average product at its __________.

answer

equals; maximum

question

_______________________ is the cost of a firm's fixed factors of production used by a firm- the cost of land, capital, and entrepreneurship

answer

total fixed costs

question

_______________ is the cost of the variable factor of production used by a firm- the cost of labor

answer

total variable cost

question

how is it possible to change its output in the short run?

answer

the firm must change the quantity of labor it employs, so total variable cost changes as output changes.

question

the vertical distance between the total cost curve and the variable cost curve is __________________________

answer

total fixed cost

question

a firm's _______________ cost is the change in total cost that results from a one-unit increase in total product

answer

marginal cost

question

_______________is total fixed costs per unit of output. this value falls as output increase

answer

average fixed costs

question

______________is total variable cost per unit of output

answer

average variable cost

question

______________is total cost per unit of output

answer

average total cost

question

a firm's average variable cost curve is linked to its ___________________

answer

average product curve

question

if average product ________, average variable cost _______.

answer

rises;falls

question

if average product is a ______________, average variable cost is a ___________

answer

maximum; minimum

question

a firm's marginal cost curve is linked to its __________

answer

marginal product curve

question

if marginal product _______, marginal cost ________

answer

rises; falls

question

if marginal product is a ___________, marginal cost is a ___________

answer

maximum,minimum

question

at small outputs,
__ and __ rise and
__ and ___ fall.

answer

MP;AP
MC;AVC

question

at intermediate outputs,
__ falls and __ rises and
__ rises and ___ falls.

answer

MP;MC
AP;AVC

question

at large outputs,
__and __ fall and
__ and ___ rise

answer

MP;AP
MC;AVC

question

________________features of a firm that make average total cost rise as output increases

answer

diseconimies of scale

question

______________are features of a firm that keep average total cost constant as output increases.

answer

constant returns to scale

question

the _____________shows the lowest average cost at which it is possible to produce each output when the firm has had sufficient time to change both its plant size and labor employed.

answer

...

1 of 45

question

the opportunity cost of a firm's production is:

answer

the highest-valued alternative forgone

question

opportunity cost include both _________ and _________.

answer

explicit; implicit

question

the explicit cost is:

answer

a cost paid in money

question

explicit costs are:

answer

opportunity costs

question

the implicit cost is:

answer

an opportunity cost incurred by a firm when it uses a factor of production for which it does not make a direct money payment.

question

what are the two main implicit costs:

answer

economic depreciation
the cost of using the firm owner's resources

question

_________________ is an opportunity cost of a firm using capital that it owns

answer

economic depreciation

question

a firms ______________ equals total revenue minus total cost

answer

economic profit

question

the __________ is a time frame in which the quantities of some resources are fixed

answer

short run

question

the ___________ is a time frame in which the quantities of all resources can be changed.

answer

long-run

question

what are the three related concepts we use to describe the relationship between output and the quantity of labor:

answer

total product: marginal product: average product

question

total product is the

answer

total quantity of a good produced in a given period

question

______________is the change in total product that results from a one-unit increase in the quantity of labor emplyed

answer

marginal product

question

equation for marginal product

answer

marginal product= change in total product / change in quantity of labor.

question

the _________ the slope of the total product curve, the _________________is the marginal product.

answer

steeper; greater

question

_________________________ occur when the marginal product of an additional worker exceeds the marginal product of the previous worker

answer

increasing marginal returns

question

what happens when a small number of workers are employed and arise from increased specialization and division of labor in the production process.

answer

increasing marginal returns occur

question

_____________ occur when the marginal product of an additional worker is less than the marginal product of the previous worker.

answer

decreasing marginal returns

question

what arise from the fact that more and more workers use the same equipment and work space.

answer

decreasing marginal returns

question

which law states: as a firm uses more of a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.

answer

law of decreasing returns

question

______________ is the total product per worker employed

answer

average product

question

average product equation

answer

average product= total product / quantity of labor

question

what is another name for average product

answer

productivity

question

when marginal product is _________ than average product, average product is ____________.

answer

less; decreasing

question

when marginal product __________ average product, average product at its __________.

answer

equals; maximum

question

_______________________ is the cost of a firm's fixed factors of production used by a firm- the cost of land, capital, and entrepreneurship

answer

total fixed costs

question

_______________ is the cost of the variable factor of production used by a firm- the cost of labor

answer

total variable cost

question

how is it possible to change its output in the short run?

answer

the firm must change the quantity of labor it employs, so total variable cost changes as output changes.

question

the vertical distance between the total cost curve and the variable cost curve is __________________________

answer

total fixed cost

question

a firm's _______________ cost is the change in total cost that results from a one-unit increase in total product

answer

marginal cost

question

_______________is total fixed costs per unit of output. this value falls as output increase

answer

average fixed costs

question

______________is total variable cost per unit of output

answer

average variable cost

question

______________is total cost per unit of output

answer

average total cost

question

a firm's average variable cost curve is linked to its ___________________

answer

average product curve

question

if average product ________, average variable cost _______.

answer

rises;falls

question

if average product is a ______________, average variable cost is a ___________

answer

maximum; minimum

question

a firm's marginal cost curve is linked to its __________

answer

marginal product curve

question

if marginal product _______, marginal cost ________

answer

rises; falls

question

if marginal product is a ___________, marginal cost is a ___________

answer

maximum,minimum

question

at small outputs,
__ and __ rise and
__ and ___ fall.

answer

MP;AP
MC;AVC

question

at intermediate outputs,
__ falls and __ rises and
__ rises and ___ falls.

answer

MP;MC
AP;AVC

question

at large outputs,
__and __ fall and
__ and ___ rise

answer

MP;AP
MC;AVC

question

________________features of a firm that make average total cost rise as output increases

answer

diseconimies of scale

question

______________are features of a firm that keep average total cost constant as output increases.

answer

constant returns to scale

question

the _____________shows the lowest average cost at which it is possible to produce each output when the firm has had sufficient time to change both its plant size and labor employed.

answer

...

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Micro: Chapter 14

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